Wednesday, June 18, 2008

We are DONE...

This blog post is gonna act as my warning to investors. I'll preface this by saying that I am not always correct. Having said that, most of my longer term market predictions have been dead on.

I am warning all investors to GET OUT of this stock market before it's too late!

Yes, I am serious. We are going to be under 10,000 and potentially a LOT lower in the next few months. Suffice to say I hope I'm wrong, but I do not think I will be. In all my years trading I have never seen so many options that are heavily traded on the financials be RIGHT. There is going to be some UGLY stuff coming down the pike, in my opinion, and no sector is going to be spared. This market feels so heavy its being held up by the skin of its finger nails.

Again, I could be wrong, and if so you can jump on me later and say I suck, that's cool, but I am very confident in this call. This market is going to get slammed with some very very bad news and it's going to get SLAMMED. And, the notion that the AGs or Tech or Solar stocks are safe havens is a JOKE. Is it the end of the world? Nope. But for most investors it doesn't have to be the end of the world for them to get creamed and suffer horribly. Do not be one of those people. The "big" event has not happened yet, but it will over the coming months and if you are an investor here you are going to get SMOKED.

Can I be any clearer? GET OUT and STAY OUT until there is blood in the streets. You've been warned!

So, what can you do? Buy some index puts to hedge your long side positions, or sell calls against your positions, or simply short the financials and some techs. We did a class and I gave some top picks not long ago. You can buy SKF to play the financials short with an ETF, and you can buy TWM to play the Russell short (tech). I would buy the Sept. or Oct. calls on those two ETFs if you agree with this idea. Keep in mind that usually things don't go in a straight line and week after next we may get a nice bounce in the financials, but I doubt it lasts more than a week before turning down again.

We shall see, but you have, indeed, been warned!

TRADE 'EM, don't own 'em! And, if you are into owning this market, please set stops to prevent a massive meltdown. This market feels a LOT heavier than even 2000 to 2003. That's how bad this market feels right now. Contrarian? Nah, I really doubt it. We shall see soon enough, market closed right near 12,000 on DOW as I said we might this week. It'll be interesting to see what they do the rest of the week. If we can't hold 12,000 then the March lows are going to be tested rather quickly!

Again, hope I'm wrong, it doesn't help our biz for the market to die that hard, but I have to call it as I see it and thats how I see it pretty freakin' strongly!

See ya on the other side,

Michael "Waxie" Parness


JB said...


Just got the new book man. Great refresher on things that I had forgotten. I have been trading for while but I'm taking it back to basics again. Quick question I do have is how do you monitor the options trading on the financial stocks or any stock for that matter? What platform or systems are you running when you trade?

Thanks for all the hope you inspire

Brain said...
This comment has been removed by the author.
Brain said...

I agree, I was out of the market last month, The Economy is bleeding, soon to be a hemorrhage, the market trys to pull you in with some stocks doing well,looks tempting, but thats smoke and mirrors for the suckers. Way too much Bad news and it's real,they keep moving the recovery up day after day, it's been a year of bad and the recovery gets moved up month after month. Currently it's pushed up again to another year. So,Recession??? Recessions were shorter then this current projection. So they need a new word for this Slump. Slumpcession? Reslumpssion? Screwdnation?

Waxie said...


I use Terra Nova and REAL TICK with them. You can sign up and mention us and you'll get some incentives to open an acct.

I have 3 monitors and I screen and run my own scans on them through them.

Good luck!